Updated: Sep 30, 2022
In this post, learn the benefits of having a living trust as a California citizen
Planning for your future is important. That said, there's more to estate planning than the standard last will and testament. So, let's go over Living Trusts and how they are often handled by our prescreened California Estate Planning Attorneys.
What Is A Living Trust In California?
It is a legal document for financial planning that permits a person (Trustee) to hold the property of another person (Settlor) for the benefit of another person (Beneficiary). Unlike a will, A Living Trust takes effect during the settlor's lifetime.
The settlor, trustee, and beneficiary are usually the same person (at least until that person dies or becomes incompetent). In other words, you can be the settlor, trustee, and beneficiary of a Living Trust if you create one.
You maintain complete control over the property and are free to use and spend it as if it had never been placed in the trust.
Why Do You Need A Living Trust In California?
The following are the most prevalent reasons for establishing a Living Trust:
1. You Avoid Probate
If you die, your property will be passed on to your beneficiaries without the necessity for probate (the official court administration of a decedent's estate). Likewise, there is no need for a conservatorship (a formal court action to handle an incompetent person's assets) if you become mentally ill.
In any instance, the person you identify as the successor trustee in your trust takes over. Again, consult your California Estate Planning Attorney to know more.
If you die, the trust property can be distributed according to your desires by the successor trustee without going through probate court. Likewise, if you become mentally incapacitated, the successor trustee can manage your assets for your benefit without the need for a conservatorship or continuous court supervision.
2. Planning for Taxes
A Living Trust can also aid in the avoidance or reduction of estate taxes, gift taxes, and income taxes.
In some cases, your tax savings might be hundreds of thousands of dollars or more.
3. Control Over Your Assets
Like a last will and testament, a Living Trust allows you to specify what will happen to your property after you die.
A trust can also be used to direct how your beneficiaries spend their inheritance (to reduce the risk of them overspending it on vacations, cars, gambling, etc.).
For more information on this, contact a prescreened California Estate Law Attorney to help you.
A trust is not public information. As a result, anyone who is not considered a beneficiary or the general public has no right to know and dig up information about the assets in your trust.
The sole exception is that when you die, the successor trustee must give all of the specified beneficiaries, as well as all of your heirs at law (i.e., relatives who would be entitled to inherit from you if you died without a Will), the right to request and receive a copy of the trust.
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